Poor communication in large firms, Alienation- working in highly specialised assembly line can be boring-workers are less motivated, Lack of control- when large number of worker easier to escape not working hard

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What is Minimum efficiency scale (MES)

Minimum point of output necessary ot achieve the lowest AC on LRAC

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MES calcualtion- IF MES for cars is 10,000 and demand is 40,000- optimum number of firms is?

4

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Total Revenue (TR)

Total income a firm recieves (PricexQuanity=TR)

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Average Revenue (AR)

TR/Output

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Marginal Revenue (MR)

Extra revenue gained from selling an extra unit of a good

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Profit=

Profit= TR-TC OR (AR-AC)xQ

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Opportunity Cost

The loss of the next best alternative when making a choice

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Economic Cost

The entire cost of the businesss action- Accounting+ Opportunity cost= Economic Cost, Includes the thing you have given up on as a cost of production